Most traders ask "what's my win rate?" when they plan an evaluation. A more useful question is: how many average losses can I take before the max loss, and how many average wins do I need to reach the target? Those two numbers decide most outcomes.
Start with the ratio
A typical evaluation might ask for a $3,000 target with a $2,000 max loss. That's a 1.5 : 1 race: you need to make one and a half times what you're allowed to lose, and the loss limit usually trails behind you.
If your edge were a coin flip with equal wins and losses, a race to +3 before −2 would succeed only about 40% of the time. You need a real edge to reach even odds.
Translate dollars into trades
Suppose your strategy wins 50% of the time, with an average win of $180 and an average loss of $120 per contract after costs.
| Contracts | Avg loss | Losses to max loss | Avg win | Wins to target |
|---|---|---|---|---|
| 1 | $120 | 16.7 | $180 | 16.7 |
| 3 | $360 | 5.6 | $540 | 5.6 |
| 6 | $720 | 2.8 | $1,080 | 2.8 |
At 1 contract the account almost never fails, but it also needs about 17 net winning trades, which can take months. At 6 contracts, three losses in a row (common for any 50% strategy) is enough to end the attempt.
Two ways to fail
- Too big: a normal losing streak hits the floor before the edge has time to show.
- Too small: the attempt runs out of time or patience. You reset, pay again, or start forcing trades.
The best size is usually in the middle, and it's narrower than people expect. That is exactly what a Monte Carlo simulation finds: it replays thousands of attempts at each size and counts how many pass, fail or stall.
Losing streaks are normal, not bad luck
A strategy that wins 50% of the time will produce a run of six or more losses in a row fairly often over a few hundred trades. If six average losses fit inside your cushion, you survive it. If they don't, the streak is the end of the attempt, not a rough patch.
Rule of thumb: size so that your worst realistic losing streak costs no more than about half of your cushion. The other half absorbs slippage, a bad day and the trailing floor moving up.
The hidden rules
Consistency rules (no single day can be more than a set percentage of total profit) and minimum trading days both stretch the attempt. A big winning day can delay a pass, because you need more profit on other days to dilute it. Model these rules, don't hope around them.
What to do with this
- Use your after-cost averages, not gross.
- Find the size where the pass rate peaks, then consider one size smaller for safety.
- Decide in advance how many sessions you'll give the attempt.
- Stress the plan: what happens if winners are 10% smaller than your backtest?
Test it on your numbers. The Prop Pass Simulator runs this on your own win rate, averages or TradingView trade list.
Educational content only, not investment advice. Rules differ by firm and change often, so always check your firm's current rules. Examples use round numbers for clarity.